Foreclosuresurvivor's Blog

Surviving Foreclosure

“Produce the Note” Strategy Wins!

Mortgage debt waived after bank can’t find paperwork

Martha C. WhiteMartha C. White RSS Feed
Oct 27th 2009 at 4:30PM
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Filed under: Banks, Real Estate, Refinancing


// Score: Little guy, 1; bank, 0. It’s a nice change.

Two weeks ago, a bankruptcy court in suburban New York did the formerly unthinkable: It waived a homeowner’s mortgage debt after the bank trying to foreclose on the home couldn’t submit any proof that it actually had a claim on the property.

According to the New York Times, when lender PHH Mortgage was asked to provide proof that it actually held the deed for the $461,263 mortgage, it couldn’t give the judge any records.

Operating on the entirely reasonable principal that someone who claims to possess a piece of paper that gives them ownership to a nearly half-million dollar house should actually have that piece of paper, the judge slapped a stiff and possibly game-changing punishment on the disorganized lender.

Real estate experts say this is a more common occurrence than many people realize, and the potential implications are huge.

During the go-go mortgage boom years, millions of loans were bundled into financial instruments called securities and sold to investors. They, in turn, often turned around and sold those securities to other investors. Making money hand over fist was the priority; keeping good records of who actually owned which mortgage wasn’t.

The shambles that many banks’ mortgage records are in today could cost them big — and keep potentially thousands upon thousands of people from losing their homes.

The idea that banks should have to prove that they actually own the mortgage that gives them the right to foreclose if the homeowner falls behind on their payments isn’t new. A group called Consumer Warning Network has been advocating for homeowners who feel railroaded into foreclosure by the lending industry by advising them to ask the lender to “produce the note” in court during foreclosure proceedings.

Good Morning America covered this tactic last spring. At the time, though, the advice was just intended to help beleageured homeowners buy some time to get their mortgage modified or find another way to come up with the money they owed. It was assumed that the banks had the proof of their claim buried in a filing cabinet somewhere.

Now, though, it’s clear that some lenders don’t have proof that they have the right to foreclose on a home, and at least one judge has put his foot down and refused to let the lender take the home without that proof.

It’s a small step so far, but it’s one that could have far-reaching implications because of the large number of mortgages that were repackaged and resold many times over earlier this decade.

Of course, if a homeowner is in foreclosure, he or she will still lose the house if the bank has all the proper documentation. But if the bank can’t produce the documentation, it’s comforting to think that a judge won’t let them put a family on the street just on that lender’s say-so that they have the proof… somewhere.


October 29, 2009 Posted by | News, Successful Foresclosure Defense | Leave a comment

packaging of mortgage securities
Goldman to Pay $60 Million in Subprime Settlement
By Kathleen M. Howley and Christine Harper

May 11 (Bloomberg) — Goldman Sachs Group Inc. agreed to pay about $60 million to settle a Massachusetts investigation into the packaging of mortgage securities at the root of the collapse of the U.S. housing market.

The agreement calls for the bank to pay about $50 million to compensate homeowners and the rest to the state, Massachusetts Attorney General Martha Coakley said today at a news conference in Boston. The deal will also allow for some loan principal reductions. Goldman Sachs directly holds 714 Massachusetts mortgages, she said.

The bundling of the riskiest type of mortgages into securities turned the U.S. housing slump into a global recession as foreclosures deflated bond values and toppled Wall Street firms such as Lehman Brothers Holdings Inc. The Massachusetts attorney general has investigated Fremont Investment & Loan, now defunct, and H&R Block Inc., owner of Option One Mortgage Corp., for making the types of mortgages that Goldman securitized.

“There’s no dispute that Goldman Sachs and other securitizers have been involved intricately in this whole process by which loans were made to homeowners and as we have argued, in many instances, destined to fail,” Coakley said.

Coakley said her investigation is ongoing and that Goldman Sachs wasn’t asked to admit wrongdoing.

Principal Reduction

“Goldman Sachs is pleased to have resolved this matter,” said Michael DuVally, a spokesman for the firm in New York. He declined to comment further.

For the “thousands” of homeowners in Massachusetts whose mortgages are serviced by Goldman Sachs’s Litton Loan Servicing LP division, Goldman will help refinance or modify the terms of qualified loans, Coakley said. For homeowners with mortgages held by Goldman entities, the bank agreed to reduce the principal of first mortgages by up to 25 to 30 percent and second mortgages by 50 percent or more, she said.

Goldman Sachs’ mortgage business is part of its fixed-income, currencies and commodities unit, the largest source of revenue for the firm. The division produced a record $16.2 billion in revenue in 2007 and helped the securities firm set a Wall Street pay record. Chief Executive Officer Lloyd Blankfein was awarded $68.5 million in pay for 2007 and each of his two co-presidents also received more than $65 million that year.

Last year none of the top executives received a bonus. The unit’s sales fell to $3.7 billion in 2008 as the company wrote down the value of leveraged loans and mortgage-related debt.

The $60 million settlement was about one and a half day’s revenue for Goldman Sachs’s fixed-income, currencies and commodities division in 2006, when it made $14.3 billion and about one and one-third day’s revenue in 2007.

Credit Default Swaps

Goldman Sachs, the world’s largest securities firm before it became a bank holding company last year, used the ABX Index and credit default swaps to hedge its subprime holdings, Chief Accounting Officer Sarah Smith wrote in an Oct. 30, 2007, letter to the Securities and Exchange Commission made public Jan. 14, 2008.

“During most of 2007 we maintained a net short subprime position with the use of derivatives and therefore stood to benefit from declining prices in the mortgage market,” she wrote.

U.S. home prices have tumbled 24 percent since reaching an all-time high in July 2006. The median price of a previously owned home was $175,200 in March, down from $230,300, according to the National Association of Realtors, based in Chicago.


The securitization of subprime mortgages fueled investor demand for the risky loans and boosted house prices as more buyers competed for properties. As a result, the market share of subprime mortgages as a percentage of all home loans went from 7 percent in 2001, the start of the real estate boom, to 20 percent in 2006.

The collapse of the subprime market in 2007 caused at least $1.4 trillion of asset writedowns and credit losses at companies such as Citigroup Inc. and Bank of America Corp. Fallout from bad mortgages toppled Lehman Brothers in September as well as the chief executive officers at Citigroup Inc., Merrill Lynch & Co. and UBS AG.

Goldman Sachs said in a January regulatory filing it has received requests for information from various government agencies on its securitization of subprime mortgages. The bank is a defendant in a class action suit sought brought by Cleveland in connection with its role bundling mortgages, the company said.

“Goldman Sachs & Co. and its affiliates are cooperating with the requests,” the filing stated, without mentioning the Massachusetts investigation.

Goldman Sachs fell $1.29 to $138.30 at 2:50 p.m. in New York Stock Exchange composite trading. The shares are up 65 percent this year through May 8.

To contact the reporters on this story: Kathleen M. Howley in Boston at; Christine Harper in New York at

October 21, 2009 Posted by | News | 2 Comments

FDIC Issues Cease & Desist Order Against Fremont Investment & Loan FDIC Issues Cease and Desist Order Against Fremont Investment & Loan

Date March 8, 2007

On March 8, 2007 the Federal Deposit Insurance Corporation (FDIC) issued a cease and desist order against Fremont Investment & Loan, Brea, California (”Bank”), and its parent corporations, Fremont General Corporation and Fremont General Credit Corporation. The FDIC found that the bank was operating without effective risk management policies and procedures in place in relation to its subprime mortgage and commercial real estate lending operations. The FDIC determined, among other things, that the bank had been operating without adequate subprime mortgage loan underwriting criteria, and that it was marketing and extending subprime mortgage loans in a way that substantially increased the likelihood of borrower default or other loss to the bank.

The order sets forth a variety of corrective actions to be undertaken. The order requires that the bank adopt a five-year strategic plan for its business. The order also requires that the bank, within 90 days, adopt a subprime mortgage lending policy with provisions designed to correct its lending practices, including that it underwrite future subprime loans with an analysis of the borrower’s ability to repay at the fully indexed rate and provide borrowers with clear information about the benefits and risks of the products. The order also requires the bank within 90 days to describe efforts it will make to restructure loans in distress consistent with the marketability of such loans and with sound principles of underwriting. In addition, the order requires the bank to fully comply with all consumer protection laws. The order also requires the bank to correct its commercial real estate lending practices.

Source of post: FDIC press release.

October 19, 2009 Posted by | Foreclosure Filings - General, Fremont Investment & Loan | Leave a comment

Duty to disclose transfering the servicing of your loan

Did you receive disclosure  including a “goodbye” letter from your loan originator AND a letter from the new mortgage company servicing your loan(s)?

October 17, 2009 Posted by | News | Leave a comment

Suing my mortgage company

Well, it’s my opinion that ALL subprime mortgage companies engage in predatory lending tactics.  That’s why they’re “subprime.”  

I had my mortgage papers that were provided at closing audited.  Not surprisingly, violations were found.  I sent a certified letter to my mortgage company requesting disclosures that were not provided with an outline of the violations.  I’m awaiting a response.

It’s actually my 2nd company.  My first was Fremont.  Turns out Fremont was sued in California. It has paid a hefty settlement to victims of their predatory lending techniques.

“In Massachusetts, Attorney General Martha Coakley reached a $10 million settlement in June with subprime lender Fremont Investment & Loan for its unfair lending practices. The state will distribute $5 million to state residents with Freemont loans, and another $3 million will go foreclosure relief and homeowners education. The rest will go to the state and to cover costs.”

See, I’m not crazy.  They were crooks in Massachusetts and they were crooks Maryland too.   My second mortgage company shares liability with a subprime lender convicted of predatory lending methods. 

We must fight back.   Now I just have to find an attorney willing to work for free to sue both companies.  I think I’ll write the Attorney General in Massachusetts and Maryland’s Attorney General for advice.

Anyone who closed on a house with a subprime lender who is facing foreclosure or has already been foreclosed on, should having their mortgage papers audited for violations.  I did. 

Thanks for letting me share.

October 16, 2009 Posted by | News, Uncategorized | 2 Comments

Getting a government job with bad credit?

Can I get a government job with bad credit? 

I mean I can see a problem with getting a position that requires a high level security clearance but as a paralegal???

October 16, 2009 Posted by | Rebuilding Credit after Foreclosure | Leave a comment

Repairing my Credit Report

I’ve enrolled with Lexington Law for credit repair work.  Years ago I used Credit Attorney.  Yes, I can do it myself but it helps to have a company using letterhead and attorney signatures.  Doing it yourself is very time consuming and tedious.

Besides having a foreclosure on my credit report, I have other things I want to have corrected.  I’m also working on settling a few matters on my report.  It’s a long tedious process. Even when you pay something off, sometimes it’s a pain to have it removed or to have the debtor indicate it’s been paid.

I’m trying to work on being able to get a job in the government or any full time job.

October 16, 2009 Posted by | Rebuilding Credit after Foreclosure | Leave a comment


I’m working through a “temp” company for $25.00 per hour.  That’s not too bad.  Temp companies don’t run credit checks most of the time.   I’ve been assigned to a long term assignment.   I’ve been contracting at this assignment for about 1 year.   I’m fortunate.  However, most holidays are not paid and I have very limited leave.   The health insurance is too expensive so I’m still using my husband’s (we’re separated) health insurance.  Obviously, contracting is not a stable full-time job.  It’s “temporary.”    The hours are flexible.  There isn’t a lot of stress.   I always work. 

I’m an English major.  I also have a Paralegal Certificate.  (I started my Master’s but can’t seem to finish it.) I’ve worked many long hours as a Paralegal.  Eventually I became a Paralegal Manager.   I  lost my job making $92,000 a year as a Paralegal Manager in a small law firm.  It all started in the Summer of 2007.   I was working as a Litigation Coordinator at a law firm in DC making $87,000 per year.  (I loved that job.)  It was a satellite office. 

One morning we were pulled into a conference room and told by management the main office decided to close the entire DC office in 2 months laying off everyone.  I didn’t panic.  Due to my hard work,  I was offered 2 positions.  However, when I started the new position, there was NO work and yet I was paid a relatively large salary.   The country was in a Recession yet we were told we weren’t for a long time.  Remember that?  I quickly realized there wasn’t a need for me.  You could cut through the tension in the office with a knife.  The country was about go into a financial black hole and I didn’t know it.  First they unjustifiably reduced the paralegal staff and then there was the problem of what to do with me.  They decided to push me out.   See law firm employees don’t have unions.  It’s not like a factory where there are mass lay offs.  It was a small firm where they can do as they please.   It’s way more advantageous to fire someone or gently ask you to go than lay you off.  There’s a risk of a law suit but they know you don’t want to be “black balled” as a problem in your industry.  DC is a small city.  Essentially I was pushed out.   It was one of the most stressful moments of my life. 

I thought with my education and work experience, I would get another job easily.  The problem was there weren’t any jobs at all.  I’ll never forget being told by a temp representative, “there aren’t any jobs.”   I was unemployed for about 8 weeks.  I couldn’t request unemployment benefits because technically I resigned.   During that time, I got behind on all my bills including my mortgage.   NO, Wilshire was NOT willing to “work with me” to modify my loan.    Besides, my home was worth MUCH less than what I purchased it for in 2006 anyway.   They foreclosed on my home in January 2009. 

My husband left us.  My daughters and I became homeless.  Have you heard of the Middle Class trap?  Well, even homeless I don’t qualify for ANY government run assistance for child care, housing, food stamps, etc. I’m rich because I’m temping!? 

 We now reside in my parents’ basement.   We are thankful.

I know I’m not alone.  For the rest of my life, I will always remember the family murder suicides that occurred on a regular basis in 2007-2009.  We’re fortunate.  We’re healthy.  I can work. We have food and shelter.   Like I said, we are fortunate.

Now I’m fighting to get a stable job and get back on track financially.

October 15, 2009 Posted by | Rebuilding Credit after Foreclosure | Leave a comment


I’m a hard working, college educated single parent Mom who is surviving foreclosure of my home in Maryland (like millions of other Americans) due to predatory lending and fraudulent bank tactics.   This site is set up to aid all of us to survive foreclosure.  Sharing ideas and solutions is powerful in getting back on track financially and emotionally.  Venting is important too.  This is how we move on.  I know I’m not alone.  Just think, every 7 minutes an American home is foreclosed.  Even when this stops, how do you get a job with foreclose on your credit report for the next 7 years?  Where do you live with bad credit and no money?  These along with many other issues are not being addressed.  We have to address them.  We have to take back our lives.

October 15, 2009 Posted by | Rebuilding Credit after Foreclosure | Leave a comment

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October 15, 2009 Posted by | Rebuilding Credit after Foreclosure | Leave a comment